Paraguay's president resigns as bank collapse freezes millions of accounts; lower house votes 78-0 to impeach
Editorial illustration — Press Pass USAParaguayan President Santiago Peña announced his resignation on Thursday, November 5, 2026, after the collapse of digital lender Ueno Bank locked about 3 million customers out of their accounts and sent protesters into the streets for a third day. Minutes after his announcement, the lower house of Congress voted 78-0 to impeach him.
Peña, an ally of U.S. President Donald Trump who was elected in 2023, said in a recorded video address posted to X that he was stepping down "with the stability of our country, social peace, and the need to preserve our democratic institutions in mind." He apologized to Paraguayans if he had failed them, but stopped short of accepting responsibility for the banking crisis.
Congressional leaders were expected to formally accept his resignation later Thursday, clearing the way for Vice President Pedro Alliana to be sworn in as president. Alliana would serve out Peña's term, which runs through August 2028. Opposition senators were still demanding a trial, arguing that allowing Peña to resign would preserve his eligibility to become a senator for life, with legal protections that could prevent his prosecution.
The crisis began when Paraguay's central bank seized Ueno Bank on Tuesday after determining that the lender had breached minimum solvency requirements. Once regulators corrected the bank's books, its capital cushion had fallen to less than half the legal minimum. Ueno's app, cards and transfers went dark and its branches locked their doors, leaving desperate depositors lined up outside. On Wednesday, a rush to open accounts elsewhere crashed other banks' mobile apps, fueling public panic.
Ueno had grown from an obscure finance company into a household name in less than five years, claiming more than 60% of Paraguay's adults as customers — roughly 3 million people in a country of 6.5 million. The bank administered close to $850 million in public funds, including money from the state pension and health funds and the operators of Paraguay's giant hydroelectric dams.
Peña faced intense political scrutiny because of his past business ties to the group that controls the bank. He was a shareholder of Grupo Vázquez, the conglomerate that owned Ueno, until March 2025. Lawmakers accused him of conflicts of interest, misuse of pension funds and institutional cover-ups. Even his mentor, Colorado Party leader and former President Horacio Cartes, backed his impeachment, saying the party would not side with "the plundering of public and private funds and pensioners' money."
The fallout had already forced the resignation of central bank chief Carlos Carvallo on Tuesday — Peña had appointed Carvallo, the former president of Ueno's predecessor company, to run the central bank. Prosecutors issued arrest warrants for eight Ueno executives on Tuesday, and they later turned themselves in. On Thursday, a judge ordered six of them, including founder Miguel Vázquez and bank President Juan Manuel Gustale, jailed pending trial, with two others placed under house arrest. Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud, alleging Ueno made large loans to related companies without adequate guarantees and diverted some of the money to other group businesses.
Under a law rushed through Congress on Wednesday, a state guarantee fund must repay stranded depositors within five business days, starting Thursday with small accounts of up to about $1,600 held by customers with no debts to Ueno. The fund insures up to about $36,000 per customer, which the central bank says will cover the full balances of an estimated 97% of clients.
The turmoil has also hit Paraguay's currency: the guaraní fell nearly 4% against the U.S. dollar on Thursday, bringing its losses this week to nearly 7%, according to central bank exchange-rate data. The Labor Ministry estimates the collapse has affected about 7,000 direct and indirect jobs at the bank and its related businesses.
Peña has repeatedly rejected suggestions of improper ties, describing the controversy as the political escalation of what began as a technical and regulatory issue and arguing that any wrongdoing should be addressed through the courts. "My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfill its purpose, and that public funds — as well as the resources that belong to all Paraguayans — be protected," he said in his address.
Sources: Reuters, "Paraguay President Peña resigns under mounting pressure from bank collapse" (Nov. 5, 2026, full text verified); Associated Press via WAMC/NPR, "Paraguay's president is impeached minutes after resigning following a bank collapse" (Nov. 5, 2026, full text verified); The Hindu BusinessLine, "Paraguay President Santiago Peña resigns after ueno bank collapse" (Nov. 5, 2026). Event date verified: resignation announced and impeachment vote held Thursday, November 5, 2026. No prior Paraguay note exists on the site; the morning breaking radar had only noted the impeachment motion as a candidate and declined it before the resignation.
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